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Gold slumps more than $85 to two-year low
China data, weak sentiment, potential central-bank sales blamed
By Barbara Kollmeyer, Carla Mozee and Sara Sjolin, MarketWatch
LONDON (MarketWatch) — Gold futures slumped more than $85 to their lowest level in over two years on Monday, as the metal dropped through key technical support levels, while the broader metals complex sank after disappointing Chinese data sparked worries of industrial metals demand.Gold for June delivery GCM3 -6.03% tumbled $87.40, or 5.8%, to $1,413.80 an ounce, but had dropped to as low as $1,384.60. Gold last week lost 4.7%.
Mining firms were hard hit by the selloff, with shares of Fresnillo PLC UK:FRES -15.40% sinking 16% in London, Polymetal International PLC UK:POLY -9.20% down 9.4% and Randgold Resources Ltd. UK:RRS -7.56% GOLD -6.38% off 7.6%.
Monday’s losses exceeded gold’s heavy drop on Friday, when it lost $63.50, or 4.1%, to $1,501.40 an ounce on the Comex division of the New York Mercantile Exchange. Friday’s settlement price marked a 20.5% drop for the most-active contract from the record settlement of $1,888.70 an ounce reached on Aug. 22, 2011.
Traders and analysts have cited numerous reasons for gold’s breakdown.
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